Ashland, Inc. D/B/A Valvoline Co. v. Harris County Appraisal District, 437 S.W.3d 50

Ashland (Valvoline) operated a Texas facility that manufactured, packaged, or stored motor oil, gear oil, and grease for export and sought the freeport ad valorem tax exemption for 2009–2011.
The Texas Constitution and Tax Code exempt freeport goods but exclude “oil, natural gas, and other petroleum products,” defined by statute as the “immediate derivatives of the refining of oil or natural gas.”
The state comptroller provided a non‑exhaustive list of 21 products deemed immediate derivatives; that list includes “lubricants” but does not specifically name motor oil, gear oil, or grease.
HCAD approved Ashland’s 2009 application but denied 2010–2011 applications; the appraisal review board and the district court granted summary judgment to HCAD, denying Ashland’s exemption claims.
Ashland’s expert (a chemical engineer) testified that base oil is an immediate derivative produced at refineries, but Ashland’s finished products are manufactured later in separate facilities by blending base oil with many additives (i.e., secondary derivatives).
The court of appeals reviewed cross‑motions for summary judgment, considered competing affidavits, and held that Ashland’s finished motor oil, gear oil, and grease are not immediate derivatives of refining and thus are entitled to the freeport exemption.

Issue	Ashland's Argument	HCAD's Argument	Held
Whether motor oil, gear oil, and grease are "immediate derivatives of the refining of oil or natural gas" (and thus ineligible for freeport exemption)	These products are manufactured after refining in non‑refinery facilities by blending base oil with numerous additives and undergoing distinct manufacturing processes, so they are secondary, not immediate, derivatives	Blending additives with base oil is effectively part of the same product chain; motor oil remains a lubricant/immediate derivative regardless of time or place of blending	Court held products are not immediate derivatives and are entitled to the freeport exemption
Admissibility/weight of expert and HCAD employee affidavits	Dr. Lockwood’s technical affidavit supports distinction between refining and downstream manufacturing; her description of manufacturing processes is factually supported	HCAD contended Dr. Lockwood’s opinion was conclusory/unreliable; HCAD’s employees were competent to describe HCAD’s practice and industry materials	Court declined to resolve all evidentiary objections as outcome‑determinative; accepted that disputed factual portions of Ashland’s evidence were sufficient and that expert legal conclusions were for the court

Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211 (Tex. 2003) (standard of review for summary judgment)
Mann Frankfurt Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009) (summary judgment standards)
Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910 (Tex. 1997) (credit evidence favoring nonmovant and drawing inferences)
Valence Operating Co. v. Dorsett, 164 S.W.3d 656 (Tex. 2005) (when both parties move for summary judgment, appellate court reviews all evidence)
FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868 (Tex. 2000) (appellate court may render the judgment that the trial court should have rendered)
Traxler v. Entergy Gulf States, Inc., 376 S.W.3d 742 (Tex. 2012) (issue of statutory construction is for courts, not experts)
Combs v. Health Care Servs. Corp., 401 S.W.3d 623 (Tex. 2013) (statutory interpretation: give plain language effect)
City of Rockwall v. Hughes, 246 S.W.3d 621 (Tex. 2008) (rules on construing unambiguous statutes)